Among those who met with Ya’alon last week were Yossi Vardi, a founder of Israel’s high-tech industry; Shlomi Fogel, a close friend of Prime Minister Benjamin Netanyahu and the controlling owner of Ampa Capital; and Mooly Edenof Intel Israel.

The three are members of Breaking the Impasse, which consists of some 200 Israeli and Palestinian businesspeople. The group, which defines itself as apolitical, aims to help the political leaders in Jerusalem and Ramallah agree on a peace deal and bring economic prosperity to both peoples.

In June, Members of the group have warned Netanyahu about a wave of boycotts and severe economic damage if the impasse in the peace process continues. Assuming the U.S.-brokered talks between Israel and the Palestinians can lead to decisions in the coming weeks, members of the group have been meeting with top ministers, including Science and Technology Minister Jacob Perry late this week.

A source with knowledge of the meeting with Ya’alon said the business leaders reiterated their concerns about the ramifications on Israel’s economy if the talks fail. But Ya’alon told the group: “Don’t delude yourselves. We don’t have a partner on the Palestinian side for a two-state solution.”

Ya’alon criticized U.S. Secretary of State John Kerry’s plan to present a “framework agreement” in January containing the principles of solutions to the core issues. He also criticized the security arrangements proposed by the Americans and rejected warnings about the danger of boycotts against Israel.

“I encourage business ties with the Palestinian Authority and believe in a long process of building from the bottom up,” Ya’alon told his interlocutors. “But an agreement shouldn’t be pushed that in my opinion won’t happen in the foreseeable future.”

Ya’alon said the agreement “in its current form” – that is, as proposed by Kerry – “is bad and will destroy the economy, apropos talk of boycotts. If we lose freedom of military action, the West Bank will turn into Hamastan, missiles will be fired at Tel Aviv and the economy will be destroyed.”

Ya’alon is the leader of the government’s hawkish line regarding Kerry’s attempts to move toward a permanent agreement between Israel and the Palestinians. In discussions with Israeli colleagues, and in discussions with Kerry over his proposal for security arrangements in the West Bank, Ya’alon has presented numerous objections to most of the clauses provided by Kerry.

Ya’alon demands that the army have freedom of movement in all West Bank cities. He also wants full Israeli control in the Jordan Valley and of all border crossings, as well as of the air space. Kerry and his advisers consider Ya’alon problematic and negative. They say his positions are extreme, unreasonable and show that he does not seek to move ahead on a permanent agreement.

Kerry is expected to return to the region in the first week of January to continue his efforts for a framework agreement. But another serious crisis in the peace talks could break out before Kerry arrives, over a third release of Palestinian prisoners who have been in Israeli jails since before the Oslo Accords.

The ministerial committee on prisoners is expected to meet today before the Sabbath begins or tomorrow night to approve the list of 20 prisoners to be released. The moment the list is approved it will be published on the Israel Prison Service website to let petitions against the release be submitted to the High Court of Justice.

According to the agreement between Israel, the Palestinians and the United States, the prisoners are to be released on Sunday. But because the ministers are meeting so late, the prisoners may not be released on time, which could increase tensions between the parties.

In addition, next week tenders are to be published for the immediate construction of 1,400 new housing units in the settlements, as a counterweight to the prisoner release. On tap are 600 units in Ramat Shlomo over the Green Line in Jerusalem and 800 units in the main settlement blocs. Planning is also to be moved ahead on construction of around 1,000 units in the settlements.

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